Africa Nigeria

Credit Rating Tools for Bank of Industry

Credit Risk, GBRW Consulting, GBRW Group, Risk Management, SME Banking, Sustainable & Development Finance

In consortium with BDO (UK and Nigeria), GBRW was contracted to provide Bank of Industry with a comprehensive three-year programme of support in SME Banking.

Bank of Industry is Nigeria’s oldest and largest Development Finance Institution. This support encompasses capacity building within the Bank itself, including SME Banking strategy, strategic marketing and segmentation strategy, product and channel development, and credit risk rating tools and models. In addition, the consortium provided Bank of Industry with an approach to building the Customer Value Proposition through Non-Financial Services, particularly enterprise development support to their SME franchise.

The key feature of the revised approach to risk management was the introduction of an SME credit rating toolkit which included industry sector risk assessment, financial statement analysis and a business risk review methodology, all tailored to the needs of the local market. Unusually, the credit rating model also included innovative approaches to assessing the risk of start-up customers, which the Bank was committed to addressing.
GBRW’s work on rating models led to an expansion of the scope into developing discrete credit rating models for large enterprises (commercial or mid-cap size), as well as for the Bank’s growing Financial Institutions portfolio required for apex lending and treasury counterparty limits.

Deliverables included:

- Development of credit rating toolkit including risk segment analysis, financial analysis and business risk review (judgemental analysis) components

- Development of structured questionnaire supporting judgemental analysis for business risk review

- Development of Business Planning Toolkit for SMEs encompassing a proposal template and a detailed financial planner

- Integration of Financial Planner with credit rating toolkit for start-up lending model

- Development of web-based widgets for business planning

- Review and enhancement of credit assessment process

- Development of credit rating models for large enterprise and the financial institutions sectors

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GBRW SME Banking & Finance